Offshore mergers and acquisitions' influence on the UK video game sector
The BFI's Research and Statistics Unit, in collaboration with Creative PEC, Games Investor Consulting, and Oxford Economics, has unveiled a new scoping study titled 'Assessing the Economic Impact of Cross-Border Mergers and Acquisitions in the UK Video Games Industry'.
The study aims to explore the feasibility of research into the economic implications and potential market disruptions caused by foreign acquisitions of UK game development studios.
The burgeoning UK video games industry has emerged as a significant economic and creative force within the screen sector and national economy. The country's technical prowess and creative achievements in globally successful video games have made domestic developers an attractive target for global companies seeking acquisitions and mergers.
Surprisingly, as of October 2023, there has been a conspicuous lack of a comprehensive analysis evaluating the economic impact of these acquisitions on the industry. Despite the fact that mergers and acquisitions have accounted for 49% of all UK video games development staff being employed by foreign-owned companies in December 2021.
This report, authored by Nick Gibson (Games Investor Consulting), Chris Warner (Oxford Economics), Yvonne Harris (BFI), Prof Hasan Bakhshi, and Dr Tom Cahill-Jones (Creative PEC), delves into the potential economic and market repercussions of such acquisitions within the video games sector.
The UK Research and Innovation (UKRI), through the Arts and Humanities Research Council, supports Creative PEC's initiatives.
While it's essential to understand the economic consequences and potential market disruptions caused by overseas mergers and acquisitions, the specific report's findings and recommendations remain unavailable at the moment. However, it's worth acknowledging the potential pitfalls of such transactions, such as decreased market competition, intellectual property control, job market fluctuations, and antitrust concerns.
Over-consolidation may stifle innovation, while foreign acquisitions might limit access to local markets due to divergent distribution strategies. On the brighter side, these transactions could enhance a UK company's global presence and widen its influence in the international gaming market.
The UK's regulatory environment, vehicle for global reach, and strategic acquisitions play crucial roles in shaping the impact of these mergers and acquisitions within the gaming sector.
- The study, authored by experts from various organizations, aims to investigate the potential economic and market implications of cross-border mergers and acquisitions in the UK's video games industry, particularly focusing on the impact of foreign acquisitions on domestic development studios.
- The burgeoning UK video games sector, characterized by its creative achievements and technical prowess, has emerged as an attractive target for global companies, with 49% of video games development staff being employed by foreign-owned companies in December 2021.
- TheReport, supported by the UK Research and Innovation (UKRI) and the Arts and Humanities Research Council, delves into the economic and market repercussions of such acquisitions, shedding light on potential pitfalls, such as decreased market competition, intellectual property control, job market fluctuations, and antitrust concerns, while also highlighting the potential benefits like increased global presence and wider influence in the international gaming market.
